EE, Vodafone, O2 and Three could be hit by spectrum price hike

EE, O2, Vodafone and Three could have to pay up to four times the current amount for the radio spectrum they use, under proposals announced by Ofcom yesterday.

By
Sam Shead
| Oct 11, 2013

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EE, O2, Vodafone and Three could have to pay up to four times the current amount for the radio spectrum they use, under proposals announced by Ofcom yesterday.

The telecoms regulator said the reason for the proposed price hike, which is set to net the UK Treasury £250 million a year, was to reflect market value in other European countries.

“Spectrum is a valuable and finite national resource, and charging for it can incentivise the optimal use of frequencies,” Ofcom said.

Ofcom claimed it was raising the licence fees the mobile operators must pay for using the 900 MHz and 1800 MHz bands on the orders of the government.

The new prices will see EE pay £107.1 million, up from £24.9 million, and Three pay £35.7 million, up from £8.3 million. Vodafone and O2's individual fees rise will rise from £15.6 million to £83.1 million.

The mobile operators said that the hikes would discourage investment in new 4G services and described them as “excessive”.

Vodafone said: “We are disappointed that Ofcom is proposing a 430 percent increase in the fees we pay for our existing spectrum at a time when we are investing more than ever in vital national digital infrastructure.”

“The regulator should be encouraging such private sector investment in infrastructure and new services like 4G, which will benefit consumers, businesses and the wider British economy for many years to come.”

EE, which faces the biggest price jump, said: “There must be a balance between licence fees and the critical 4G network investment consumers and businesses are demanding to drive growth and jobs."